Published: June 25, 2007Jackson Memorial Hospital
Jackson hospital's lease sends rent soaring
The Miami-Dade public hospital signed a lease at the planned biotech park that will lift its rent to $350,000 a year, from $80,000.

The proposed Poinciana Biopharmaceutical Park's most prominent tenant isn't a multinational drug company or a well-endowed research university.

It's Miami-Dade County's cash-strapped public hospital.

In April, Jackson Memorial agreed to close two clinics in Liberty City to open one in the proposed biotech park -- at more than four times the rent the hospital currently pays.

Today, Jackson spends $80,000 a year in rent for the Juanita Mann Health Center and nothing for the Liberty City Health Services Center.

Yet, under a 15-year lease signed by Jackson Health System's Chief Executive Officer Marvin O'Quinn, the county hospital will pay $350,000 a year in rent -- a 337 percent increase -- to New England developer Dennis Stackhouse.

The move comes as Jackson struggles with rising healthcare costs and a growing population of indigent residents turning to the hospital for care.

In fact, the actual rent for the yet-to-be-built, 35,000-square-foot clinic is $770,000 a year -- or more than nine times what Jackson currently pays.

To get the lower rent, the hospital agreed to ''assist'' Stackhouse with federal, state and local grants.

The lease does not define how the hospital must help with the grants, but Jackson's lawyers say any grant application would have to be approved by the hospital staff.

''We're not quite there yet,'' said Assistant County Attorney Jeffrey Poppel. ``Every contract has a measure of good faith.''

Jackson's attorneys said that Stackhouse offered to lease the space for $80,000 a year but that compliance officers raised questions about the appearance of impropriety.

If the hospital paid less than fair market value, the attorneys said, some might assume that the hospital was providing patients, medical records or other information for drug trials conducted at the biotech park.

So the hospital asked to pay more.

''There may have been a misperception that there was something improper here if the rent was so low,'' said Assistant County Attorney Jack Hartog.

Sandy Sears, the administrator in charge of the hospital's clinics, said that Jackson has long sought to consolidate the two clinics and that the move would allow it to provide additional care to Liberty City residents.

''We've always talked about expanding services to the community,'' Sears said.

But she could provide no plan or document that shows consolidating the clinics was a goal prior to Stackhouse's proposal.

In fact, Jackson says it doesn't need all 35,000 square feet it plans to lease. It hopes to offset the additional cost by subleasing space to the Florida Department of Health.

''Jackson Health System's involvement in this project stems from our mission to provide quality medical care to all residents of Miami-Dade regardless of their ability to pay,'' said spokesman Robert Alonso, who also pointed out that the hospital hasn't paid any money for the clinic yet.

Stackhouse was under tremendous pressure to get Jackson to sign the lease.

In January, Miami-Dade County commissioners agreed to purchase a parking garage in the biotech park, using as much as $23 million that had been set aside to fight poverty.

To secure the deal, Stackhouse had to sign the hospital within 90 days.

Among those on the 16-member board overseeing the hospital: County Commissioner Dorrin Rolle, who has received thousands in campaign contributions from Stackhouse's company and a $10,000 donation to a nonprofit he heads; and Jorge Arrizurieta, one of Stackhouse's registered lobbyists, who works for Akerman Senterfitt, a Miami-based law firm that Stackhouse says he paid more than $250,000 in recent years.

The board, known as the Public Health Trust, approved the lease in August 2005 but had to reapprove it in March because the original resolution expired while construction of the building was stalled.

Rolle voted for the original resolution but was absent from the March vote. Arrizurieta, who joined the board last year, recused himself from the final vote.

''I found out the item was on the agenda the day of the vote,'' Arrizurieta said.

Rolle did not respond to calls seeking comment.

The resolution approved by the Public Health Trust says that consolidating the clinics in the biotech park will improve their ''cost effectiveness.'' But over the course of the lease, the hospital will pay an additional $4 million in rent without decreasing its staff.

The hospital provides more than $500 million in charity care to uninsured patients every year.

A half-cent county sales tax helps fund the charity care, but the tax falls far short of the actual cost of caring for the uninsured.

That equation has led to massive deficits at Jackson.

In 2004, the county pumped an extra $76 million into the hospital so it could balance its budget. The following year, Jackson turned a profit for the first time in five years.